Executive Summary

QCI reported first revenues in FY 2022 at $0.136M with 55% gross margin and transitioned from R&D to commercialization; operating expenses rose 114% to $36.7M and net loss widened to $38.6M, driven by merger-related costs and stock-based comp .
Cash burn averaged ~$1.46M/month in 2022; year-end cash was disclosed at ~$5.3M, while audited cash and equivalents on the balance sheet show $3.79M, a discrepancy to monitor; liabilities rose to $14.4M including $8.4M in debt .
Management guided to EBITDA breakeven at ~$30M revenue and projected cashflow breakeven within two years, expecting 2023 revenue ramp to accelerate in 2H23 .
Strategic catalysts: QPhoton integration, launch of Dirac-1 EQC subscriptions and QAmplify, government-facing subsidiary QI Solutions, and a NASA subcontract for quantum LiDAR testing .

What Went Well and What Went Wrong

What Went Well

Transition to commercialization with full-stack photonic quantum offerings; CEO highlighted photonics outperforming gate-model/annealers and cited academic validation: “There is growing industry and analyst recognition and acceptance that photonic based quantum computing is outperforming the initial quantum architectures…” .
Product launches and milestones: Dirac-1 EQC subscription service; QAmplify expands QPU processing power up to 20x; demonstration wins including BMW sensor optimization (3,854 variables solved in 6 minutes) .
Government go-to-market set up: formed QI Solutions for U.S. government/defense, and secured a NASA subcontract via SSAI to test photonic LiDAR for climate monitoring .

What Went Wrong

Expense escalation and dilution: 2022 OpEx up 114% to $36.7M (stock-based comp $17.8M); net loss increased to $38.6M; ~26.8M share increase YoY from QPhoton merger; fully diluted shares ~74.3M .
Liquidity and leverage: average cash burn ~$1.46M/month; unsecured note of $8.25M at 10% (Streeterville) introduced redemption/covenant constraints; FY debt $8.4M .
Controls/legal overhang: disclosure controls deemed not effective due to staffing (segregation of duties); BV Advisory litigation and appraisal demand related to QPhoton create uncertainty .

Financial Results

Metric	Q2 2022	Q3 2022	Q4 2022	FY 2022
Revenue ($USD)	$65,484	$37,646	$1,278 (=$135,648 − $134,370 )	$135,648
Gross Profit ($USD)	$60,251	$12,755	−$17,964 (=$74,714 − $92,678 )	$74,714
Gross Margin %	92%	34%	n/a (derived margin negative given Rev/COGS mix)	55%
Operating Expenses ($USD)	$4,868,615	$6,846,748	$18,210,090 (=$36,654,056 − $18,443,966 )	$36,654,056
Net Income (Loss) ($USD)	$(5,104,576)	$(7,569,278)	$(18,786,154) (=$38,593,700 − $19,807,546 )	$(38,593,700)
Diluted EPS ($USD)	$(0.14)	$(0.16)	n/a (no quarterly EPS disclosed)	$(0.69)

Balance/Cash KPIs:

Metric	Q2 2022	Q3 2022	FY 2022
Cash and Equivalents ($USD)	$6,742,793	$10,381,376	$3,794,734
Total Assets ($USD)	$91,880,061	$95,324,021	$89,300,331
Total Liabilities ($USD)	$1,298,851	$11,144,472	$14,403,600
Total Debt ($USD)	—	$8,250,000 note established (Streeterville)	$8,400,000 total debt

Notes:

FY press release states “Cash at year-end 2022 totaled approximately $5.3 million” vs audited balance sheet cash and equivalents $3.79M; management also disclosed $7.5M cash as of March 27, 2023 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue trajectory	FY 2023	None disclosed	Gradual 1H23 increase; acceleration in 2H23	New qualitative outlook
EBITDA breakeven threshold	N/A (structural)	None disclosed	EBITDA breakeven at ~$30M annual revenue	New metric introduced
Cashflow breakeven	~2 years	None disclosed	Projects cashflow breakeven within 2 years	New timeline
Product roadmap cadence	2023	None disclosed	Multiple launches (Dirac-2, RQC, QRNG, chips, imaging, networks) in 2023	New roadmap disclosure

Earnings Call Themes & Trends

No Q4 2022 earnings call transcript was found in our document system; thematic comparison is based on Q2/Q3 MD&A vs FY press release.

Topic	Previous Mentions (Q2/Q3)	Current Period (Q4/FY)	Trend
AI/technology initiatives	Qatalyst platform; AWS Braket integration; QGraph/QAmplify features	Emphasis on photonic EQC (Dirac-1), RQC; QAmplify up to 20x QPU power	Broadening from software to full-stack photonics
Supply chain/optimization use cases	Targeted for logistics, emergency response, community detection	BMW sensor optimization solved rapidly; windmill placement; nuclear fuel rod optimization pilots	From concept to demonstrated PoCs
Government/public sector	Strategy evolution; no subsidiary	Formation of QI Solutions focused on U.S. government/defense	Formal government channel established
Product performance/energy efficiency	Not quantified	Dirac-1 achieves optimal solution with <80W vs GPUs >500W in BMW example	Efficiency highlighted as differentiator
Regulatory/legal	None highlighted	BV Advisory litigation/appraisal; covenant-heavy debt terms	Legal/leverage risks increase
R&D execution	Building EQC/RQC; chip plans	2023 roadmap adds QRNG, chips, imaging, networks	Accelerated roadmap post-merger
CHIPS Act/Manufacturing	Facility plan evaluation	Pursuing funding to establish photonic chip fabrication	Funding pathway clarified

Management Commentary

“We… have entered the commercialization phase… becoming a full stack, comprehensive quantum enabling company… firmly established as an emerging leader in photonic quantum information processing…” – Robert Liscouski, Co-Founder & CEO .
“We have done so and are well positioned to take orders for our Entropy Quantum Computer, Quantum LiDAR, Quantum CyberSecurity products and subscriptions… roll out a series of products… During 2023 we expect to be well on our way to delivering material revenue growth with attractive gross margins and with disciplined cost controls.” – Robert Liscouski .
Guidance emphasis: “expects revenues to gradually increase in the first half of the year and progressively accelerate during the second half of 2023… achieves EBITDA breakeven at roughly $30 million in annual revenue and projects cashflow breakeven within 2 years” .

Q&A Highlights

No earnings call transcript was available for Q4 2022 in our document system; therefore, analyst Q&A themes and clarifications could not be assessed.

Estimates Context

Wall Street consensus (S&P Global/Capital IQ) for Q4 2022 and FY 2022 could not be retrieved due to an S&P Global API limit at the time of access; as a result, we cannot assess beats/misses versus consensus. Values retrieved from S&P Global were unavailable at time of query.

Key Takeaways for Investors

Commercial pivot is real but early: FY revenue remains de minimis; derived Q4 revenue implies minimal top-line while groundwork (products, government channel) is laid .
Cost structure reset: 114% OpEx increase and heavy stock-based compensation drive losses; monitor OpEx discipline vs 2023 revenue ramp claims .
Liquidity/leverage: track cash burn vs cash levels and Streeterville note redemptions/covenants; subsequent ATM raise netted $6.4M in Q1’23 .
Photonic EQC differentiation: real-world demos (BMW) and energy efficiency claims could be a narrative driver; watch customer conversions from PoCs to paid subscriptions .
Government exposure: QI Solutions and NASA subcontract provide potential non-dilutive revenue pathways; assess backlog and funding (e.g., CHIPS Act) .
Guidance yardsticks: EBITDA breakeven at ~$30M revenue is a clear milestone; 2H23 acceleration commentary sets expectation — scrutinize quarterly bookings/revenue cadence vs this path .
Legal/control risks: internal control deficiencies and BV Advisory litigation create overhang; resolution timelines matter for multiple expansion .

Citations: .

Quantum Computing Inc. (QUBT)·Q4 2022 Earnings Summary